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RepublicofthePhilippines
SUPREMECOURT
Manila
FIRSTDIVISION
G.R.No.L78519September26,1989
VICTORIAYAUCHU,assistedbyherhusbandMICHAELCHU,petitioners,
vs.
HON.COURTOFAPPEALS,FAMILYSAVINGSBANKand/orCAMSTRADINGENTERPRISES,INC.,
respondents.
FranciscoA.Lara,Jr.forpetitioner.
D.T.RamosandAssociatesforrespondentFamilySavingsBank.
RomuloT.SantosforrespondentCAMSTrading.

GRINOAQUINO,J.:
This is a petition for review on certiorarito annul and set aside the Court of Appeals' decision dated October 28,
1986inCAG.R.CVNo.03269whichaffirmedthedecisionofthetrialcourtinfavoroftheprivaterespondentsinan
actiontorecoverthepetitioners'timedepositsintherespondentFamilySavingsBank.
Since 1980, the petitioner, Victoria Yau Chu, had been purchasing cement on credit from CAMS Trading
Enterprises, Inc. (hereafter "CAMS Trading" for brevity). To guaranty payment for her cement withdrawals, she
executed in favor of Cams Trading deeds of assignment of her time deposits in the total sum of P320,000 in the
Family Savings Bank (hereafter the Bank). Except for the serial numbers and the dates of the time deposit
certificates,thedeedsofassignment,whichwerepreparedbyherownlawyer,uniformlyprovided
...Thattheassignmentservesasacollateralorguaranteeforthepaymentofmyobligationwiththe
saidCAMSTRADINGENTERPRISES,INC.onaccountofmycementwithdrawalfromsaidcompany,
perseparatecontractexecutedbetweenus.
On July 24,1980, Cams Trading notified the Bank that Mrs. Chu had an unpaid account with it in the sum of
P314,639.75. It asked that it be allowed to encash the time deposit certificates which had been assigned to it by
Mrs.Chu.ItsubmittedtotheBankaletterdatedJuly18,1980ofMrs.Chuadmittingthatheroutstandingaccount
with Cams Trading was P404,500. After verbally advising Mrs. Chu of the assignee's request to encash her time
deposit certificates and obtaining her verbal conformity thereto, the Bank agreed to encash the certificates.It
deliveredtoCamsTradingthesumofP283,737.75only,asonetimedepositcertificate(No.0048120954)lacked
the proper signatures. Upon being informed of the encashment, Mrs. Chu demanded from the Bank and Cams
Trading that her time deposit be restored. When neither complied, she filed a complaint to recover the sum of
P283,737.75fromthem.ThecasewasdocketedintheRegionalTrialCourtofMakati,MetroManila(thenCFIof
Rizal,PasigBranchXIX),asCivilCaseNo.38861.
InadecisiondatedDecember12,1983,thetrialcourtdismissedthecomplaintforlackofmerit.
ChuappealedtotheCourtofAppeals(CAG.R.CVNo.03269)whichaffirmedthedismissalofhercomplaint.
Inthispetitionforreview,sheallegesthattheCourtofAppealserred:
1.Innotannullingtheencashmentofhertimedepositcertificatesasapactumcommissoriumand
2.Innotfindingthattheobligationssecuredbyhertimedepositshadalreadybeenpaid.
Wefindnomeritinthepetitionforreview.

TheCourtofAppealsfoundthatthedeedsofassignmentwerecontractsofpledge,but,asthecollateralwasalso
money or an exchange of "peso for peso," the provision in Article 2112 of the Civil Code for the sale of the thing
pledgedatpublicauctiontoconvertitintomoneytosatisfythepledgor'sobligation,didnothavetobefollowed.All
thathadtobedonetoconvertthepledgor'stimedepositcertificatesintocashwastopresentthemtothebankfor
encashmentafterduenoticetothedebtor.
TheencashmentofthedepositcertificateswasnotapactocommissoriowhichisprohibitedunderArt.2088ofthe
CivilCode.Apactocommissorioisaprovisionfortheautomaticappropriationofthepledgedormortgagedproperty
bythecreditorinpaymentoftheloanuponitsmaturity.Theprohibitionagainstapactocommissorioisintendedto
protecttheobligor,pledgor,ormortgagoragainstbeingoverreachedbyhiscreditorwhoholdsapledgeormortgage
over property whose value is much more than the debt. Where, as in this case, the security for the debt is also
money deposited in a bank, the amount of which is even less than the debt, it was not illegal for the creditor to
encashthetimedepositcertificatestopaythedebtors'overdueobligation,withthelatter'sconsent.
Whether the debt had already been paid as now alleged by the debtor, is a factual question which the Court of
Appeals found not to have been proven for the evidence which the debtor sought to present on appeal, were
receiptsforpaymentsmadepriortoJuly18,1980.SincethepetitionersignedonJuly18,1980aletteradmittingher
indebtednesstobeinthesumofP404,500,andthereisnoproofofpaymentmadebyherthereaftertoreduceor
extinguish her debt, the application of her time deposits, which she had assigned to the creditor to secure the
paymentofherdebt,wasproper.TheCourtofAppealsdidnotcommitareversibleerrorinholdingthatitwasso.
WHEREFORE,thepetitionforreviewisdenied.Costsagainsttheappellant.
SOORDERED.
Narvasa,CruzandMedialdea,JJ.,concur.
Gancayco,J.,tooknopart.
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